Films Budget v/s Films Revenue

Hi Guys, This is in extension to the post which I wrote yesterday. The reason I’m writing on this topic is to discuss the relevance of revenues to the cost of the film. We have seen various equations in bollywood. We have seen small budget movie like Bheja Fry which was made under strict budget of 50 Lakhs and 2 cr. was the marketing cost generating overall ticket sale revenues of more than 20 cr. We have also seen movies like Game which was shot in 5 different countries and overall cost of production and marketing was Rs. 65 cr. doing a business of just 5 cr. in its lifetime on ticket window. So a question arrived in my mind should there a defined budget for a movie and no movie should be expensive than that?

Lately we have witnessed many production houses which are into making small budget movies with some path braking content. The flagship brand in this segment is Balaji and ALT production of Ekta Kapoor. Her approach is to spend very less on production and spend 4 times of production cost on marketing. With her ALT banner she has produced LSD and Ragini MMS. Both the films were made under the strict budget of 1 cr. and around 4 cr. were spend on marketing of the film. And as we know that both the films have generated more than 30 cr. ticket revenues for Ekta Kapoor. Another production house which is promoting such movies is UTV Spotboy. The movies produced by this production house are Dev.D, Udaan etc. They don’t spend as much as Balaji in marketing but they also have been quite successful till date in their approach.

Another group consist of production houses which spend a lot both on production and marketing. Excell Entertainment can be tagged as the master of this approach. Till date Excell Entertainment has produced movies like DCH, Lakshya, Rock On, DON, Game and Zindagi Na Milegi Dobara. Lately the cost of producing the films by Excell Entertainment has increased tremendously. The way they produced Game can be seen as the disaster in bollywood. As already mentioned the cost of the movie was 65 cr. and they were able to recover on 5cr. from ticket sale. After Game, Excell is getting one step ahead with ZNMD by producing it in whopping 75 cr. Another production house which is spending money like water is Red Chillies. I wonder when both the production houses come together for DON 2, how much money will be spend on production and marketing and the real question is that will it worth it?